Federal Circuit Continues to Support Patent Injunctions

January 27, 2012, 04:23 PM

In a series of cases handed down recently, the Federal Circuit continued its post-eBay efforts to bolster the injunctive remedy provided to patent owners. Although many questioned whether injunctive relief would be readily available to patent holders both before and after trial in the wake of the more stringent test for injunctive relief handed down by the Supreme Court decision in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006), the Federal Circuit continues to affirm injunctive relief and to defer to the findings of the trial courts on irreparable harm, balance of hardship, and on the scope of the injunctions granted. In Celsis in Vitro, Inc. v. CellzDirect, Inc., No. 2010-1547, 2012 U.S. App. Lexis 372 (Jan. 9, 2012), the Court reviewed a district courts entry of a preliminary injunction under an abuse of discretion standard. (citing Abbot Labs. v. Sandoz, Inc., 544 F.3d 1341,1345 (Fed. Cir. 2008)). In reviewing the record, the Court upheld the trial courts conclusion that their was a likelihood of success on the merits. In addition, the Court accepted the lower courts finding of irreparable harm based on price erosion, damage to ongoing customer relationships, loss of goodwilland loss of business opportunities. These losses were particularly irreparable to the company since it was in the growth and brand building stage and because of the difficulty in quantifying the effect of these damages. The Court refused to consider the defendants argument that these effects were indeed quantifiable because the market was in essence a two-competitor market. The Court leveraged these irreparable harms to uphold the district courts finding that the balance of hardship and public interest favored a preliminary injunctionespecially since the defendants failed to provide countervailing expert evidence and because it determined that the defendants harms were the result of their own calculated risk in selling a product with knowledge of [the patent in suit]. (citing Sanofi-Synthelabo v. Apotex, Inc. 470 F.3d 1368, 1383 (Fed. Cir. 2006)). Similarly, in Streck, Inc. Research & Diagnostic Systems, Inc., No. 2011-1044, 2012 U.S. App. Lexis 458 (Jan. 10, 2012), the Federal Circuit rejected a challenge to the scope of injunctive relief granted by a district court. After applying the four eBay factors, the Court entered a permanent injunction against the defendants enjoining them from making, using, selling, or importing into the United States certain accused products and from otherwise infringing the asserted claims of [the patents-in-suit] until the expiration of the last to expire of the Patents-in-Suit. While the defendants did not appeal the underlying eBay findings, they did challenge the scope of the injunction as overly broad because the otherwise infringing language was ambiguous and unbounded under Rule 65 of the Federal Rules of Civil Procedure. Straying from focusing just on the language of the injunction, the Court concluded that [a]fter careful consideration, and considering the injunction in context, the language of the injunction was not overly broad; the injunction referred to the specific products at issue, and the [m]ere inclusion of the [challenged phrase], when taken in context of the entire order and record on which it was entered, does not render the injunction overbroad. (emphasis added). In short, the Court used the context and record to cure any ambiguities or over breadth in the scope of the injunction. Stephen E. Noona is the head of Kaufman & Canoles Trial Section and Co-chair of its Intellectual Property Law and Franchising Practice Group. He has been counsel in over ninety (90) patent cases in the Eastern District, is Fellow in the American College of Trial Lawyers, and has appeared before the judges in all four Divisions of the Eastern District on patent and intellectual property matters. —Stephen E. Noona